Phoenix Police Unit Aiming to Stem Retail Theft
On January 11, the Target Corporation contacted the Phoenix Police Departments Organized Retail Theft Detective David Lake to report that more than $50,000 in iPods that had been stolen from its regional distribution center in Phoenix. Detectives from the police department worked with officials from Target for an investigation, which resulted in four search warrants and the arrests of four individuals on January 15.
These four young men worked on Targets loading docks and had devised a way to smuggle the iPods from the docks without being readily detected and were selling them on the internet, Lake said.
This case is not unique, he said. It is just an example of what is taking place everywhere. Our retailers are under siege and along with them is the retail tax base that provides money to pay for police, firefighters and other city services.
Stolen and counterfeit items are easily sold on Craigs List, eBay or even private sellers on the internet.
He said this growing Black Economy is actually eating away at the future of the citizens and municipalities abilities to provide services for its citizens. About 46 percent of the income for a city comes from sales tax. If people are buying from counterfeit or illegal markets, they are putting merchants out of business that generate sales tax that pay for city services.
Things have gotten so bad that The Arizona Legislature on September 1, 2007, mandated an Organized Retail Crime Task Force to try to stop the hemorrhaging of tax revenues from the tax base of Arizonas cities, but Phoenix Police have been trying to stem the flow for a decade.
Lake said he began to see a rise in this type of crime in about 1998, when the internet started to become more common.
Now, 10 years later, retailers with the big box stores have added their own resources to help police make cases against those who are stealing from them. Target has its own crime lab, Lake said.
While retail crime has grown, the Phoenix Police Department has not. Police do not have the time or the manpower to man hidden cameras to monitor activity. The big box stores do that. They gather evidence to the point where police can start to make a case.
In the past, we would tell them, were sorry but we have no way to help you, said Lake who has been working retail crime for more than six years. He is also having some success teaching the owners of business, large and small, ways to protect themselves how to help prepare a case in a way that police can work it.
In the most recent Target case, the thieves had stolen about $50,000 since September.
They were doing things like shipping empty containers to the stores. Company officials first had to determine where the iPods went missing. Was it from the store? During transit? They had to do a lot of investigation themselves before there was enough evidence for a search warrant, Lake said.
These kids between 19 and 27 just thought they would never get caught and didnt think it would be a big deal if they did, Lake said. These were clean-cut guys. Target had done background checks before hiring them, and Target isnt hiring criminals.
But, Lake pointed out, when the young thieves began selling what they had stolen, they crossed over to facing serious felony charges for trafficking in stolen property.
In another recent case, a group of employees on a Walgreens loading dock were stealing oxygen concentrators, about $80,000 worth in eight months, and selling them to a business that sold them over the web.
Lake said these people stole so much from their previous employer that the company went out of business, so they moved on to Walgreens Medical.
Walgreens did their own investigation, narrowed it down to three people. They then called police who executed a search warrant.
We got confessions, but the worst thing about it is that these things need to be calibrated every 180 days. We dont know how many people may have died because they were not getting enough oxygen, Lake said.
Another type of retail crime is the sale of counterfeit music and movies. During an operation last May they called Pirates of the Oasis, police broke up a ring in Phoenix that could have cost the city $1.5 million in sales tax revenue had the items hit the street, he said.
The point is, these cause a loss of retail sales tax to the economy because they are an illegal or unfair competitor. It just sucks money out of our economy. The manufacture and sale of counterfeited goods makes 600 times more than the sale of illegal drugs. Just in music and movies it is a $300 million a year business worldwide.
The FBI used to investigate this type of counterfeit business, but since 9-11, their focus is on terrorism, Lake said.
When the sales tax base is under siege, we dont get more cops, because sales tax is what pays for public safety, he said.
When a city is unable to generate sales taxes, there is a lowered ability for the city to provide safety services, businesses start moving out and urban blight moves in.
We are at war for the economy, he said.